REV 32 2511 (11/2/21)
Purchase price is within 20% ($4,000) of fair market value, so use tax is based on purchase price. At a tax rate of 9%, the
use tax on $17,000 would be $1,530.
Example 2 - Vehicle purchase price is more than 20% below fair market value
Fair market value: $15,000
Purchase price: $11,000
Difference: $4,000
Purchase price is more than 20% ($3,000) below fair market value, so use tax is based on fair market value unless the
buyer can demonstrate the vehicle value is only $11,000. At a tax rate of 9%, the use tax on $15,000 would be $1,350.
However, if it is determined the value of the vehicle is $11,000 based on its condition; the use tax rate at 9% would be
$990.
Example 3 - Vehicle fair market value below $7,500
Fair market value: $6,900
Purchase price: $1,000
Fair market value is less than $7,500 so use tax is based on the purchase price on the bill of sale. At a tax rate of 9% the
use tax on $1,000 would be $90.
Gifts or Inheritance
When you receive a vehicle by gift or inheritance, your vehicle is exempt from tax if the previous owner paid
Washington Retail Sales Tax or Use Tax and there is no consideration given.
If the vehicle being gifted was registered in another state, credit will be given for tax previously paid.
Vehicles gifted or inherited with outstanding loans generally will not qualify for a gift exemption. When you receive a
vehicle with a loan, the vehicle title will reflect a lienholder and it is not owned outright. The Registered Owner is
responsible for any financial encumbrance and must pay off the loan prior to gifting the vehicle or it is considered a sale
- and tax will be due on the fair market value.
Clean alternative fuel and plug-in vehicles (expires 07/31/25)
There is a limited Use Tax exemption for purchases of new and used passenger cars, light duty trucks, or medium duty
passenger vehicles that are exclusively powered by a clean alternative fuel, or a plug-in hybrid that can travel at least 30
miles on battery power alone.
To be eligible for the exemption, the total selling price of a qualifying new vehicle cannot exceed $45,000 and the fair
market value of a qualifying used vehicle cannot exceed $30,000 (WAC 458-20-279).
A current list of qualifying vehicles can be found at www.dol.wa.gov.